World Bank Research Faulted. CEPR Analysis Shows That World Bank Data Don't
Support Their Conclusion That Globalization Has Benefited the Poor

WASHINGTON, DC-- The Center for Economic and Policy Research (CEPR) today
released a study analyzing the World Bank's controversial paper, "Growth Is
Good for the Poor" (March 2000).

The World Bank's paper (www.worldbank.org/research) had claimed to show that
"growth generally does benefit the poor and that anyone who cares about the
poor should favor the growth-enhancing polices of good rule of law, fiscal
discipline, and openness to international trade." CEPR's analysis shows that
the data from the paper do not support this conclusion. Among CEPR's
findings and conclusions:

Economic growth in the developing world, excluding China, has declined
dramatically over the last 20 years. "There is no region of the world that
the World Bank and IMF could claim as success stories for their policies,"
said Mark Weisbrot, co-director of CEPR and the principal author of the
study. "We need further research to determine how much these institutions
are responsible for this slowdown in economic growth-- a slowdown that
hundreds of millions of poor people in underdeveloped countries can ill
afford." In Latin America, for example, per capita grew by 75% from
1960-1980, whereas from 1980-1998 it has only risen 6%. For sub-Saharan
Africa, GDP per capita GDP grew by 36% in the first period, while it has
since fallen by 15%.

Except for the positive correlation between economic growth and the incomes
of the poor-- which is not controversial-- almost all of the statistical
tests in the World Bank paper yield insignificant results. On the basis of
such insignificant results, it is not possible to conclude, as the World
Bank paper does, that IMF and World Bank policies such as increased openness
or anti-inflationary macroeconomic policies benefit the poor.

Even the relationship between economic growth and the income of the poor is
not as strong as the World Bank paper indicates. There are numerous
instances in which not only the poor but the majority of the labor force
have failed to share in the gains from economic growth. This is true in the
United States, for example, where the real median wage today is the same as
it was 27 years ago.

The full report, "Globalization May Be Good For the Poor-- But are World
Bank and IMF Policies Good for Growth?" is available at www.cepr.net , along
with the executive summary.